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Mutual fund investors buy gilt funds, dump equities

Indian mutual fund investors disposed off equities as they iturn to gilt funds in January 2013.

According to recent data release by the Association of Mutual funds in India ( AMFI), equity funds have seen net outflows of Rs 2,501 crore and gilt funds have seen net inflows of Rs 1,145 crore.

"Equity investors are exiting their investments as they see their investments going above their purchase price.

Debt at the same time attracts investors, as it has given double digit returns in last one year while 10 year benchmark yield move down from 8.4% to 7.8%," says Abhishek Gupta, CEO, Moat Wealth Advisors.

He advises investors to go for both "accrual-driven mutual fund schemes and duration-driven mutual fund schemes."

In a falling interest rates regime, such schemes can offer capital appreciation to investors. Gupta advises taking exposure to equity through balanced funds, as the debt component can reduce volatility in the returns.